WITH the New Year just around the corner it’s the perfect time to think about saving some cash in 2024.
If you’re planning your resolutions, there are some tips you can follow to sort out your finances and pocket up to £3,100 by the end of the year.
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Putting money away doesn’t have to be a pain, as with some ‘silent’ hacks you won’t even notice the cash coming out your account.
People are continuing to feel the pinch and with energy bills set to increase again in the New Year, keeping an eye on your finances is more important than ever.
Saving even a small amount can mean you have cash to fall back on in an emergency, instead of having to borrow money, something that can end up costing you more because of interest.
Whether it’s upping your pension contributions or putting aside as little as 1p a day – there are some simple tricks you can follow.
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We spoke to the experts about the easiest ways you can save cash and how much you could add to your piggy bank by the end of the year.
Round it up – £900
One of the easiest ways you can save cash is by simply putting aside your spare change.
Dean Butler, managing director for Retail Direct at Standard Life, told The Sun: “Try rounding up your spending every day to the next £10, and transferring the difference into an easy-access savings account.”
So, for example, if you spend £27.20 in a day, consider it £30, and transfer £2.80.
It might seem small but it will build up over time, forming a decent rainy-day buffer and earning you some interest along the way.
Dean added: “You might also find yourself restricting any unnecessary spending as if you spend, say, £30.80, you’ll have to call it £40.
“Even if you just average £2.50 a day like this, you’ll save about £75 a month or £900ish a year.”
Many banking apps offer automatic saving features that round up your everyday purchases to the nearest whole amount.
That means you don’t have to do any of the workings yourself and your bank will do it for you.
Some will also offer extra interest on your balance to boost your pot.
Of course do bear in mind, that how much you save depends on your spending.
If your bank doesn’t offer the rounding-up feature, then you can also do this with budgeting apps like Emma and Plum.
Boost your pension contributions by 1% – £1,529
Another simple hack to boost your savings, and give yourself a bigger retirement pot, is to increase your pension contribution by as little as 1%.
Most Brits have a workplace pension scheme which helps employees save for their retirement outside of the state pension.
Since October 2012, employers have had to automatically enrol workers into one of the schemes.
There are minimum contributions that you and your employer must pay.
A minimum of 8% must be paid into the pension, with you contributing 5% and your employer paying at least 3%.
But workers should look at boosting the amount that they save into their pot by just 1% could increase their nest egg substantially upon retirement.
Becky O’Connor, director of public affairs at PensionBee said: “While this may seem like a modest adjustment, even a small increase today can have a significant impact on your future pension pot due to the power of compounding.
“This is a manageable change that won’t drastically impact your current lifestyle but lays the groundwork for greater financial security.”
For example, if you earn £30,000 and pay in an 8% monthly contribution, you have £1,274 a year initially and are on track for a pension pot of £242,846 at retirement.
But if you increase this to 9%, your personal contribution goes up to £1,529 a year and your eventual pension pot, up to £273,179.
This is an increase of £255 a year in total, but £30,333 in your retirement pot.
1p savings challenge – £671.61
There are plenty of savings challenges that you could embark on in the New Year.
One of the most straightforward ones is the 1p savings challenge.
Jon Styles, money guidance manager at the Money and Pensions Service explained: “The 1p savings challenge starts by saving 1p on the first day, then 2p on the second and so on, always putting away 1p more than you saved the day before.”
While this might not seem like much, it really does rack up over the course of the year.
In fact, it will leave you with a total of £671.61 saved in total for 2024.
Jon added: “You can change the amount you save each day if you think you can do more.
“For example, you could do the 5p savings challenge, increasing by this amount each day.”
He recommended saving £1 a day, every day for a year, leaving you with £365 saved.
Jon also said: “For those with higher budgets, increasing the amount you save each day of the week by £1 can be effective.
“Start by saving £1 on Monday, £2 on Tuesday right through to £7 on Sundays. This is £28 a week and by the end of the year, you’ll have £1,456.”
Of course, it’s important to make sure you’re only putting away what you can afford.
Don’t overextend yourself and make sure you’re prioritising the essentials – such as groceries and bills.
More easy saving tricks
There are many savings challenges people can try, whether you only want to put in £1 each week or if you’ve got a bit more to play with.
Here are some we’ve seen:
No-spend January – £500
A no-spend challenge is when you go for a set period of time without spending any money, other than on essentials like food and bills.
This could be a week, weekend, or a whole month.
January can be a prime time to kickstart any savings, so why not try a no-spend month?
We have seen some savvy savers put away as much as £600.
You can do this by deleting shopping apps to avoid temptation, cancelling costly subscriptions, walking to save petrol, and finding free activities to do on the weekend.
52-week challenge – £1,378
The 52-week challenge works by getting participants to put aside £1 for the first week, £2 for the second, £3 for the third and so forth, until the end of the year.
The amounts start small, but towards the end of the year, you might find the weekly savings target grows too big.
For example, you’ll have to put away the largest sums around Christmas with £202 in total required in the final four weeks of the year.
So before you start, consider whether it could be too much of a stretch at an already expensive time of year.
If you can stick to it though, the payoff is huge as you’ll pocket a whopping £1,378.
You could always flip it and start off with the biggest amount (£202 a week) and then get smaller – it might be worth making a chart so you can keep on top of figures.
365-day challenge – £1,456
If the 52-week challenge seems a little daunting, you might prefer the 365-day challenge.
You’ll set aside £1 on Sunday, £2 on Monday, £3 on Tuesday and so on, all the way up to saving £7 on Saturday – the largest daily amount of the week.
You then restart the process on the next Sunday.
This should give you a weekly total of £28 in savings – adding up to £1,456 over the cost of the year.
Money mistake jar
With a money mistake jar, you can make things more personal.
The idea is that you challenge yourself not to do something, or to not make a “mistake”.
For example, maybe you want to challenge yourself to go running three times a week, or maybe you want to stop buying takeaways.
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These can be your “mistakes” and if they’re not fulfilled then you can put money into the jar.
On the flip side, you could consider it a reward jar, and set aside a small amount each time you do something positive like choosing a home-cooked meal over a takeaway.
You can also join our new Sun Money Facebook group to share stories and tips and engage with the consumer team and other group members.
